AFTER THREE days of delays and frantic negotiations with the country’s lenders, the Greek government finally sat down for a meeting last night to approve a tough austerity agreement that, if accepted, will pave the way for the country to receive a second bailout, worth €130 billion, next month.
After two further postponements yesterday, Greek prime minister Lucas Papademos met the party leaders of his three-way coalition at 5pm to obtain their endorsement for the €3.3 billion cost-cutting programme.
The party leaders had earlier received the 50-page draft agreement, which was finalised at last-minute meetings on Tuesday between the troika inspection team, Mr Papademos and his finance minister, Evangelos Venizelos. Officials said the delay in starting the talks was caused by the need to translate the draft document from the original English.
As he made his way into the meeting, which took place at the prime minister’s official residence, the leader of the smallest coalition party criticised the troika for laying more austerity at Greece’s door, comparing the measures to a pair of ill-fitting shoes.
“Austerity measures are like shoes that are too tight. Sooner or later, you want to kick them off,” said Yiorgos Karatzaferis of the far-right Popular Orthodox Rally (Laos). He said troika representatives were using “time as a means to blackmail”.
Few believed the comments from Mr Karatzaferis – a former bodybuilder who made his way into politics through his own television station – would torpedo the agreement. But party sources said their leaders would seek modifications to the terms of the agreement. In recent statements, conservative New Democracy leader Antonis Samaras said he was opposed to pension cuts in particular.
After the meeting got under way, details from the austerity catalogue appeared in the Greek media. Among the harsher measures was a proposal to cut the minimum monthly wage, which stands at €751, by 32 per cent for employees under 25, and by 22 per cent for all others.
The deal also foresees a cut, backdated to January 1st, of 15 per cent in the pensions of former employees of the state-run banks and telephone and electricity utilities firms, and of 7 per cent for merchant seamen. Also included in the measures is a requirement to remove 15,000 civil servants from their jobs this year, through sackings if necessary. This is part of a commitment to reduce by 150,000 the total number of government employees by 2015.
Leaders were also called to sign off on cuts in supplementary pensions and to agree a wage freeze until unemployment, currently more than 18 per cent, falls to below 10 per cent.
Some four hours into the talks, Pasok and New Democracy officials said the leaders had taken a break so Mr Papademos could bring up objections raised by the party leaders with Eurogroup chairman Jean-Claude Juncker.
With a general election expected in April, if the bailout deal and related debt-swap programme are agreed, political leaders are keen to be seen as engaged in a game of brinkmanship with the troika.
An opinion poll published yesterday showed former prime minister George Papandreou’s Pasok on 8 per cent, trailing in fifth place. It seems to have shed most of its support to the Democratic Left, which has only four out of 300 MPs in the parliament.
While New Democracy topped the poll, which appeared in the daily Kathimerini, its 31 per cent share will mean it will most likely have to seek a coalition partner.
It is a message not lost on all MPs, who will be asked to vote in parliament on Sunday on whatever is agreed.